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    Russian Economy General News: #7

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    miketheterrible

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    Re: Russian Economy General News: #7

    Post  miketheterrible on Tue Nov 08, 2016 2:25 pm

    China and other countries such as African or Asian needs Russia for both resources and their scientific base while Russia needs the markets. Only natural, especially since not us existence is threatened by the US. India is a wildcard and thus neither reliable for either side. Not good or bad.

    Austin

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    Re: Russian Economy General News: #7

    Post  Austin on Tue Nov 08, 2016 4:46 pm

    As Russia saves most of its reserves in USD and Euro, Can US or EU block all the money in their Banks which belong to Russian Central Bank ?

    Can they block over night ?
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    miketheterrible

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    Re: Russian Economy General News: #7

    Post  miketheterrible on Tue Nov 08, 2016 5:04 pm

    Yes, and they done it before to Iraq. But do this to major players will get others to hedge against the USD.

    Project Canada

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    Re: Russian Economy General News: #7

    Post  Project Canada on Tue Nov 08, 2016 5:24 pm

    which is why Russia must gradually reduce their reserves in USD/Euro to a minimum, the less leverage the US and its cronies over Russia (and its allies) the better, this will limit US actions to these countries down to only starting a war, which in turn will further expose uncle Scam's real face to the world

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    Re: Russian Economy General News: #7

    Post  Austin on Tue Nov 08, 2016 6:55 pm

    miketheterrible wrote:Yes, and they done it before to Iraq. But do this to major players will get others to hedge against the USD.

    Which means it can happen to Russia too , EU and US can do that to Russia.

    Why is central bank so foolish inspite of all sanctions they keep reserve in USD and Euro , Is Putin foolish too
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    Re: Russian Economy General News: #7

    Post  GunshipDemocracy on Tue Nov 08, 2016 7:32 pm

    Austin wrote:
    miketheterrible wrote:Yes, and they done it before to Iraq. But do this to major players will get others to hedge against the USD.

    Which means it can happen to Russia too , EU and US can do that to Russia.

    Why is central bank so foolish inspite of all sanctions they keep reserve in USD and Euro , Is Putin foolish too

    Then Russia can nationalize all western investments not to mention stop paying any debts back (some trillions + $500bln) but i do not think it is going to happen any time. We both know CBR keeps reserves in papers securities not cash mainly. This is also way of balancing attacks to destabilize Russia. Like lack of liquidity.

    We do not know what reasons behind CBR decisions are to behind scenes blackmails and threats...
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    miketheterrible

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    Re: Russian Economy General News: #7

    Post  miketheterrible on Tue Nov 08, 2016 7:32 pm

    Austin wrote:
    miketheterrible wrote:Yes, and they done it before to Iraq. But do this to major players will get others to hedge against the USD.

    Which means it can happen to Russia too , EU and US can do that to Russia.

    Why is central bank so foolish inspite of all sanctions they keep reserve in USD and Euro , Is Putin foolish too

    It is a two way game. The Central bank of Russia is doing what all central banks do - play the money market to see if their gambles win. On other hand, they have been diversifying their reserves and still keep USD as a "in case". Reality states if US tries this, it could break their own backs as their currency would no longer be considered safe. But this was already the case with both Libya and Iraq. So you got people who realise this and made changes in Russia. And you got people who stuck with the only thing they know of, what they were taught, and just don't know better (Central Bank). Not malicious, just not imaginative or inventive in their techniques. Which can pose a problem to Russia, yes.
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    GunshipDemocracy

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    Re: Russian Economy General News: #7

    Post  GunshipDemocracy on Tue Nov 08, 2016 7:45 pm

    miketheterrible wrote: But this was already the case with both Libya and Iraq. So you got people who realise this and made changes in Russia. And you got people who stuck with the only thing they know of, what they were taught, and just don't know better (Central Bank). Not malicious, just not imaginative or inventive in their techniques. Which can pose a problem to Russia, yes.

    Libya or Iraq did not have nukes and highly developed science/technology. If Us tries to bloc something they would get mor edamge themselves.

    So far they did not even push for more sanctions...means to me thet not far is from their problems

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    Re: Russian Economy General News: #7

    Post  andalusia on Wed Nov 09, 2016 6:31 pm

    Project Canada wrote:which is why Russia must gradually reduce their reserves in USD/Euro to a minimum, the less leverage the US and its cronies over Russia (and its allies) the better, this will limit US actions to these countries down to only starting a war, which in turn will further expose uncle Scam's real face to the world

    You make a good point. People on this forum are optimistic Trump will be different than the other presidents, I have plenty of reservations. Will he continue American financial imperialism or stop it? He says he wants good relations with the world and respects them as partners. Obama said the same thing and made promises like reducing student loan debt but that did not happen.
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    Re: Russian Economy General News: #7

    Post  kvs on Wed Nov 09, 2016 11:57 pm

    andalusia wrote:
    Project Canada wrote:which is why Russia must gradually reduce their reserves in USD/Euro to a minimum, the less leverage the US and its cronies over Russia (and its allies) the better, this will limit US actions to these countries down to only starting a war, which in turn will further expose uncle Scam's real face to the world

    You make a good point. People on this forum are optimistic Trump will be different than the other presidents, I have plenty of reservations.  Will he continue American financial imperialism or stop it? He says he wants good relations with the world and respects them as partners.  Obama said the same thing and made promises like reducing student loan debt but that did not happen.  

    Yes, Trump is just another US oligarch who is not going to fundamentally change the character of that Empire. But he seems not to be completely
    demented with the anti-Russian neocon agenda like Killary. So there may be some sanity increase if he manages to stay in office in the next 4 years
    without being assassinated or impeached. There are still a lot of neocons in the Republican Party who occupy senate and congress seats. They
    could conspire with neocons in the Democratic Party to bring Trump down over some contrived claims.

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    Re: Russian Economy General News: #7

    Post  Austin on Thu Nov 10, 2016 5:48 am

    Russia cannot depend on Good Will of US President for the well being of its economy and why should it even keep currency of a country that is most hostile towards Russia ? Would US do the same if the relation were at same level , no it wont.

    Just dump those USD and Euro for God Sake , Just buy more gold and invest in IMF SDR and Chinese Renminbi

    keep USD/Euro reserve no more than 20 % of Forex
    Keep 30 % Chinese Renminbi
    Keep 40 % Physical Gold
    Keep 10 % in IMF SDR and other denomations.

    Is Putin waiting for a day when they will confiscate Russian forex and then Nukes on them is it ?

    If required decrease Chinese Renminbi to 20 % and keep 50 % physcial gold

    By buying USD they are just subsidising US Economy, how naieve can CBR/Putin be

    Austin

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    Re: Russian Economy General News: #7

    Post  Austin on Thu Nov 10, 2016 5:57 am

    The Chinese Currency is now into IMF SDR , The Central Bank has little reason not to keep forex in Renminbi.

    Cut a long term deal with Chinese to sell Oil/Gas in Renminbi ( besides USD/Euro ) and in return for long term chinese investement into Russian Economy , Chinese have huge requirement for Oil/Gas and if they would most happy purchase more from Russia if we sell them in Renminbi and Russia would be more than happy to let Chinese Companies Invest in Russian Economy.

    This would drive West into Panic and would force them to reconcile with Russia , Its like killing two birds with one Stone.

    If need be add Rouble to the Oil Basket so that any one who wants to purchase Energy Resource from Russia can do so in Rouble/Renminbi/USD/Euro
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    miketheterrible

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    Re: Russian Economy General News: #7

    Post  miketheterrible on Thu Nov 10, 2016 6:10 am

    Putin doesn't control the CBR nor has control over the Forex. That is the CBR. If Putin interferes with it, it would be breaking the constitution which would force Putin to be indicted. The constitution needs to be changed first. CBR still has to work in favor of the Russian federation, but it can do so on its terms and one of that is how they deal with the FOREX. Unfortunately the US is a major economy due to its strength in both Banking and Administration, that it's currency is a safe investment and one that is a low risk investment compared to Yuan, Rupee, Yen, etc. Even Euro isn't as safe. Gold is also not exactly safe investment either as evident as late with constant fluctuations. So they stick to the safest one in terms of returns.

    But it is growing unsafe due to hostility of US. And also its faltering economy. But as someone else said, the US will not hold it back because they know the Russians can cause major damage to US economy both directly (pulling its investments, calling in the debt owned by US, and forcing sale of needed resources in Rubles or other currency (which will strike hard at commodity prices) and indirectly (other countries dropping USD as well in fear they lose out). Reason they could do it to Iraq and Libya was due to US having the advantage over those two (Iraq needed the equipment and cannot buy from Russia without the money. US won't give it to Iraq unless they buy from US) countries and their very lack of importance in the international stage.

    Austin

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    Re: Russian Economy General News: #7

    Post  Austin on Thu Nov 10, 2016 6:21 am

    The CBR does not appear to be working in favour of Russia but the Global Central Bank and that is Bull Shift argument that CBR is independent , All Central Bank work in co-ordination with their Government , The Fed does that , Indias RBI does that and so does EU Draggi.

    Russia cannot afford to be passive , How Russia would react to US confiscating its Forex is secondary but primary it should work to secure its asset , It has to be proactive.

    I am not saying dump the USD/Euro entirely but just reduce its % from 45/40 % to like 15/15 % that would give US/Euro less leverage over Russia . Cut deal with chinese to keep forex in Renminbi and sell it in same in return for Long Term Investement in Russian Economy , Russia does not need security gurantees from Chinese like Gulf countries need from US but Chinese Economic Investment is what it needs.

    The West are going to screw up Russia as long as it plays by its Rule Book . Gold is the Most Prefect Asset outside the power of any Central Bank in world buy it as much as one can , Russia should have Gold Reserves of atleast 5000 Tons , The Germans have around 4000 and US 8000 i.e if they even exisit in US vaults.

    Rouble will be at a qualatatively different level if the Forex has 50 % gold reserves but the CBR has to do it. CBR right now is more than happy controlling inflation by High Interest Rates choking the economy of cheap money and thinks it has done a great thing controlling inflation ! Duh

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    Re: Russian Economy General News: #7

    Post  Austin on Thu Nov 10, 2016 6:55 am

    The World Bank announced a reduction of poverty in Russia


      • [url=http://vk.com/share.php?url=http%3A%2F%2Fizvestia.ru%2Fnews%2F643938&title=%D0%92%D1%81%D0%B5%D0%BC%D0%B8%D1%80%D0%BD%D1%8B%D0%B9 %D0%B1%D0%B0%D0%BD%D0%BA %D1%81%D0%BE%D0%BE%D0%B1%D1%89%D0%B8%D0%BB %D0%BE %D1%81%D0%BD%D0%B8%D0%B6%D0%B5%D0%BD%D0%B8%D0%B8 %D0%B1%D0%B5%D0%B4%D0%BD%D0%BE%D1%81%D1%82%D0%B8 %D0%B2 %D0%A0%D0%BE%D1%81%D1%81%D0%B8%D0%B8 -][/url]


    The decrease in this indicator affect the process of import substitution

    World Bank Chief Economist (WB) by Apurva Sanghi Russia presented a report on Russia, which was a reduction of poverty by 0.5 percentage points. It is associated with the program of import substitution and high yield. In addition, the World Bank expects a further decrease in the level of poverty in the Russian Federation due to the country's economic recovery.

    According to World Bank data, in the first half of 2016 14.6% of Russia's population (21.4 million people) were living below the poverty level, which is 0.5 percentage points lower than last year.

    Apurva Sanghi said that while food inflation has declined a second, and poverty has declined due to the fact that this food are the basis of purchases of the poorest citizens. At the same time, he said, is still vulnerable middle class.

    As Rosstat data show, food prices grew in January-September by only 2.4%, which is significantly lower than last year. CB noted that an important role in this process was played by the seasonal deflation, harvest 2016 and reducing the rate of inflation. Indicators for Agriculture has been achieved by the introduction of programs to support the agricultural sector in the framework of the import


    Читайте далее: http://izvestia.ru/news/643938#ixzz4PaB2yolX
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    miketheterrible

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    Re: Russian Economy General News: #7

    Post  miketheterrible on Thu Nov 10, 2016 2:23 pm

    Austin wrote:The CBR does not appear to be working in favour of Russia but the Global Central Bank and that is Bull Shift argument that CBR is independent , All Central Bank work in co-ordination with their Government , The Fed does that , Indias RBI does that and so does EU Draggi.

    Russia cannot afford to be passive , How Russia would react to US confiscating its Forex is secondary but primary it should work to secure its asset , It has to be proactive.

    I am not saying dump the USD/Euro entirely but just reduce its % from 45/40 % to like 15/15 % that would give US/Euro less leverage over Russia . Cut deal with chinese to keep forex in Renminbi and sell it in same in return for Long Term Investement in Russian Economy , Russia does not need security gurantees from Chinese like Gulf countries need from US but Chinese Economic Investment is what it needs.

    The West are going to screw up Russia as long as it plays by its Rule Book . Gold is the Most Prefect Asset outside the power of any Central Bank in world buy it as much as one can , Russia should have Gold Reserves of atleast 5000 Tons , The Germans have around 4000 and US 8000 i.e if they even exisit in US vaults.

    Rouble will be at a qualatatively different level if the Forex has 50 % gold reserves but the CBR has to do it. CBR right now is more than happy controlling inflation by High Interest Rates choking the economy of cheap money and thinks it has done a great thing controlling inflation ! Duh

    I understand your point but you also need to understand that USD is still the main trading currency of the world, and the least volatile. It is still used as trade between Russia and various states because the other states may not want Rubles, Yuan or Euros. Even China and India has a large USD reserve. Funny you mention the other central banks but actually, CBR does actually work in tandem with Russian government and a huge part of the happenings within it are agreed upon by Putin and Co. Putin isn't dumb and understands they need USD as part of the Forex and used for trade and development. They keep it high for now specifically for business but as one may have noticed, they dropped over the years the amount of USD per the total Forex. It is due to increasing amount of businesses dealings between other states in their own respective currencies, as well as buying of Gold.  The other part of the FOREX is that of us debt. So that also accounts.

    So far, US in all intent and purpose, has not blocked Russia's USD in its Forex. If they did do that, then you would see massive shifts going on and not just Russian FOREX but other nations as well. Even if US does block it, the amount in Forex Russia has in other assets is still enough to not damage the nations banking system.  And the Russians, as you pointed out, is increasing their reserves in other currencies such as Yuan.

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    Re: Russian Economy General News: #7

    Post  Austin on Thu Nov 10, 2016 2:41 pm

    miketheterrible wrote:
    So far, US in all intent and purpose, has not blocked Russia's USD in its Forex. If they did do that, then you would see massive shifts going on and not just Russian FOREX but other nations as well. Even if US does block it, the amount in Forex Russia has in other assets is still enough to not damage the nations banking system.  And the Russians, as you pointed out, is increasing their reserves in other currencies such as Yuan.

    According to CBR USD % is 45 and Euro is 40 , So I dont see how they have reduce the USD from Forex.

    I clearly understand that part that USD remains the least volatile system  but Russia is an Export Economy it exports more than import , If some one wants to be paid in USD it is fine but Russia can convert its own excess USD reserves into Gold or Diversify partially into Renminbi.

    Intent and Purpose of US can change over night and both US and EU can work in Tandem to block which means Russia is left without 85 % of its reserves over night.

    Atleast with Gold they have it with them in their hand and China would be much less hostile to Russia even if relations go bad and they cant be pressurised by US or Euro.

    Like I said and I repeat  , Russia now cannot depend on Good Will of US and Euro ,who are hell bent on harming Russian Economy and we dont need any proof they say and do so.

    It is better for Russia to act proactively on its own interest and  stop pretending Nukes would deter such action or that what happened to Libya and Iraq cant happen to Russia  , Just because Russia Forex gets blocked other countries wont dump their reserves its naive to think that.
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    miketheterrible

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    Re: Russian Economy General News: #7

    Post  miketheterrible on Thu Nov 10, 2016 2:45 pm

    They are increasing gold reserves and have used USD to purchase it.  I know you want it to be large amounts of USD converted but that would greatly affect the gold market in price fluctuations.  China also buys small amounts compared to what it can actually afford.

    Like I said, understandable your view, but reality is that when Russia imports vital tools and components, it requires USD. Maybe 10 years from now it will be different and Yuan will account for 20% of Forex. Who knows.

    And yes, others would dump the Forex of USD to minimum as they would see how volatile it is. If that wasn't the case, US would have blocked it by now. They already have near to total sanction on Russia as is.

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    Re: Russian Economy General News: #7

    Post  Austin on Fri Nov 11, 2016 10:44 am

    miketheterrible wrote:They are increasing gold reserves and have used USD to purchase it.  I know you want it to be large amounts of USD converted but that would greatly affect the gold market in price fluctuations.  China also buys small amounts compared to what it can actually afford.

    Like I said, understandable your view, but reality is that when Russia imports vital tools and components, it requires USD. Maybe 10 years from now it will be different and Yuan will account for 20% of Forex. Who knows.

    And yes, others would dump the Forex of USD to minimum as they would see how volatile it is. If that wasn't the case, US would have blocked it by now. They already have near to total sanction on Russia as is.

    Right now Russian Gold Reserves is worth around ~ $55 billion or ~ 1500 Tons , even if they double it it will be just 3000 T , Germany has 4000 T.

    Russia needs atleast 50 % of its reserves in Gold , She has nothing to worry as far as security goes.

    They can always pay their export in USD who every wishes by their current account which is net positive.

    Bottom line is you need to keep the currency with country with whome you trade most.

    So if Euro is the largest trading partner with Russia then they can keep 25 % reserves in Euro , If China is 2nd largest then they can keep 20-25 % of it , Russia-US trade is just $30 billion which is very low down the order.

    They can keep 40 % reserves in Gold and remaining 10-15 percent in USD/SDR/GBP and what not.

    Its a fair thing , This way they can always hedge their risk without overexposing them self to  over night failure like the case now

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    Re: Russian Economy General News: #7

    Post  Austin on Fri Nov 11, 2016 10:45 am

    Jim Rickards: The Road To Ruin

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    miketheterrible

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    Re: Russian Economy General News: #7

    Post  miketheterrible on Fri Nov 11, 2016 5:44 pm

    Austin wrote:
    miketheterrible wrote:They are increasing gold reserves and have used USD to purchase it.  I know you want it to be large amounts of USD converted but that would greatly affect the gold market in price fluctuations.  China also buys small amounts compared to what it can actually afford.

    Like I said, understandable your view, but reality is that when Russia imports vital tools and components, it requires USD. Maybe 10 years from now it will be different and Yuan will account for 20% of Forex. Who knows.

    And yes, others would dump the Forex of USD to minimum as they would see how volatile it is. If that wasn't the case, US would have blocked it by now. They already have near to total sanction on Russia as is.

    Right now Russian Gold Reserves is worth around ~ $55 billion or ~ 1500 Tons , even if they double it it will be just 3000 T , Germany has 4000 T.

    Russia needs atleast 50 % of its reserves in Gold , She has nothing to worry as far as security goes.

    They can always pay their export in USD who every wishes by their current account which is net positive.

    Bottom line is you need to keep the currency with country with whome you trade most.

    So if Euro is the largest trading partner with Russia then they can keep 25 % reserves in Euro , If China is 2nd largest then they can keep 20-25 % of it , Russia-US trade is just $30 billion which is very low down the order.

    They can keep 40 % reserves in Gold and remaining 10-15 percent in USD/SDR/GBP and what not.

    Its a fair thing , This way they can always hedge their risk without overexposing them self to  over night failure like the case now

    They can, and they are. Hence why now with Yuan it will be a major (If not majority) of Russia's currency reserves in the future. Many companies will not take gold as payment and may not exchange it either, so there is a reason for currency reserves. Germany claims it has 4000T worth of gold in its reserves but I highly doubt it. Much to the same with America's claim to 7000T of stored gold. Never has been proven and as far as most are concerned, is gone much like Ukraine's.

    Simple fact is, world trade is done in USD, regardless if you like it or not. Until we break away from that, majority of the worlds currency reserves will be in USD. Of course with the addition of the Yuan, it becomes a much easier way to diversify the reserves and keep it away from the hands of others. Russia is obtaining gold reserves at a proper pace. Buying too much of it will cause hyper inflation in the gold price market. Something no one wants.

    Anyway, we are going in circles here. You will just have to show patience. It will take its time but who knows. Maybe one day Yen and Rupee's will be another major currency in the reserve pool for Russia.

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    Re: Russian Economy General News: #7

    Post  Austin on Sat Nov 12, 2016 5:48 am


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    Re: Russian Economy General News: #7

    Post  Austin on Sat Nov 12, 2016 5:58 am

    miketheterrible wrote:

    They can, and they are.  Hence why now with Yuan it will be a major (If not majority) of Russia's currency reserves in the future.  Many companies will not take gold as payment and may not exchange it either, so there is a reason for currency reserves.  Germany claims it has 4000T worth of gold in its reserves but I highly doubt it.  Much to the same with America's claim to 7000T of stored gold.  Never has been proven and as far as most are concerned, is gone much like Ukraine's.

    The way central bank is behaving it does not look like that , They have been buying more USD recently , just a small rise in Gold purchase. Companies pays from their own pocket and if they want USD the CBR can maintain USD/Euro ratio of say 30 % to take of trade and internal circulation. I am against the whole idea of having full capital account convertibility which lets citizen freely purchase USD/Euro , neither China or India has that.


    Simple fact is, world trade is done in USD, regardless if you like it or not.  Until we break away from that, majority of the worlds currency reserves will be in USD.  Of course with the addition of the Yuan, it becomes a much easier way to diversify the reserves and keep it away from the hands of others.  Russia is obtaining gold reserves at a proper pace.  Buying too much of it will cause hyper inflation in the gold price market.  Something no one wants.

    Let the world trade in USD but IIRC even 35 % of trade is done in Euro too , As far as Russia goes they can always trade in Euro with  EU and Renminbi with China , two major trading partner , ROW can be in USD if they wish so.

    I am not suggesting we break away from USD , I am stating keep the currency you trade most with that way the deterrent works on both sides , With USD Russia does not have much levearage as she has with Europe or China say the way China has with US and she can afford to trade in USD as US will never sanction China.

    CBR can certainly increase the buying rate to 500 T per year infact it was doing so at peak of sanction/crisis in 2014/15 but then it slowed down as crisis tapered some what and started purchasing Green Buck



    Anyway, we are going in circles here.  You will just have to show patience.  It will take its time but who knows.  Maybe one day Yen and Rupee's will be another major currency in the reserve pool for Russia.

    During SU days India and SU used to have Rupee Rouble trade that worked for them well , They can try and go back there , Should work great for both countries

    With China with Renminbi in Reserve Basket and China being the largest trading nation in world they can afford to keep Renminbi as Forex reserves.



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    Re: Russian Economy General News: #7

    Post  miketheterrible on Sat Nov 12, 2016 8:13 am

    It is said to be increase in USD but what they don't say is that they purchase into US bonds which translates to USD reserves. Doing so has returns. Small ones though (2% maybe at best). If there has been an increase, it isn't in simple of exchanging Rubles for US dollar but possible purchases in US debt of some sort. Gold prices have fluctuated uncontrollably so there is a reason why the slowdown in purchases. You may not be a fan of the decision of the CBR but you will have to deal with it because the CBR and the overall government has kept the country more stable in the years of massive sanctions and heavy attacks at Russia's financial institutions mixed with low commodity prices, vs than lets say 2008 time when GDP dropped a fair bit. More in that one year than it was for the last couple of years. So it is clearly due to someone doing their job properly.

    As for the rest, Russia is increasing agreements of trade in respective currencies. As you may have noticed with the news of China, India, Iran, etc all trading in each other currencies. But that won't change things all of a sudden.

    If the US could simply block the USD portion of Russia's FOREX, without repercussions, then they would have done it already to strong arm Russia. They have not and for various facts already pointed out. I would like them to demolish the USD as the trading currency by dumping it, as I like to see the world burn. But it isn't going to really solve anything either. Could make Russia even more vulnerable actually as US could see an opportunity to strike at Russia's FOREX that wont hurt itself, by going after the other currencies and the commodity market even more.

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    Re: Russian Economy General News: #7

    Post  Austin on Sat Nov 12, 2016 3:48 pm

    Russia’s M2 money supply rises 0.46% in July
    August 31, 2016 - Prime



    Russia’s money supply in national definition, or M2, grew 0.46% in July to 36.654 trillion rubles as of August 1, as seen by PRIME in data of the central bank on Wednesday.

    The national-definition M2 aggregate includes cash in circulation and Russian residents’ ruble accounts with Russian banks.
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    See more: http://cbonds.com/news/item/843907

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